Wani LLP v The Royal Bank of Scotland Plc

Permission to make a substantial amendment shortly before trial depends on a fair balance between the history and explanation for the delay, the prejudice to the applicant, the prejudice to the opposing party, and the clarity and particularity of the proposed pleading. Lateness is relative and depends on the nature and consequences of the amendment, but a heavy burden rests on a party seeking a very late amendment. The amended pleading must define the case to be met without reliance on further evidence or later particulars. The court must also refuse an amendment with no real prospect of success. Where the amendment is reasonably arguable but late, unclear, and likely to cause substantial disruption, refusal may be justified, particularly where the applicant can still pursue a viable existing claim and the prejudice is substantially self-inflicted.

Wani LLP brought claims against the Bank arising from an interest rate swap connected with a loan for commercial premises. The action had been pleaded on several bases, including alleged statutory and fiduciary duties, misrepresentation, negligence and breach of contract. Shortly before a five-day trial, the claimant sought extensive amendments. The proposed amendments abandoned several claims, introduced a common law duty to explain hedging products, altered the alleged counterfactual from taking no hedge to taking an interest rate cap, and relied on the possibility that the London Development Authority would pay the cap premium.

The Bank opposed the disputed amendments on grounds of delay, lack of clarity and particularity, and the need for further investigation, disclosure and evidence. The central issue was whether permission should be granted under the principles governing late amendments.

1. Application of principles. The court applied the approach in Swain-Mason v Mills & Reeve LLP [2011] EWCA Civ 14, as summarised in Brown v Innovatorone Plc [2011] EWHC 3221 (Comm). The relevant considerations were the history and explanation for the delay, prejudice to the applicant if refused, prejudice to the respondent if allowed, and whether the amendment was clear and particularised. Lateness is relative, and its weight depends on the nature of the amendment and its consequences.
2. The claimant had known of the factual basis for the proposed amendments through the judgment in Crestsign Ltd v National Westminster Bank Plc and The Royal Bank of Scotland Plc [2014] EWHC 3043 (Ch) and its own witness evidence for several months. The instruction of new counsel, and difficulties following the change of solicitors, did not provide a satisfactory explanation for the delay.
3. The proposed alternative cap was insufficiently pleaded. It did not identify the terms which the claimant would have accepted or allege that those terms would have been acceptable to the Bank. The allegation concerning payment of the premium by the London Development Authority was also hypothetical and required investigation of contractual documents, disclosure and further evidence.
4. Allowing the amendments would substantially disrupt a case ready for trial. The Bank would need further factual investigations, disclosure and evidence concerning the London Development Authority, funding, internal credit approval, the alleged information duty and contractual limitations. The claimant would retain viable existing claims if permission were refused, and its prejudice was largely self-inflicted.
5. The proposed amendments were not so obviously unsustainable that lack of merits alone required refusal. Nevertheless, the balance firmly favoured refusal of the disputed amendments. The parties were invited to agree which unopposed amendments and further evidence could remain.

First-instance decision. The judgment records no appeal or earlier decision in the present litigation.